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Switzerland Schedules Corporate Tax Overhaul For 2020

by Ulrika Lomas, Tax-News.com, Brussels

21 June 2019


The Swiss Federal Council has announced that the Federal Act on Tax Reform and AHV Financing (TRAF) will enter into force on January 1, 2020.

The TRAF was approved in a referendum on May 19, 2019. Certain transitional provisions took effect on May 22, 2019.

On June 14, the Council issued an ordinance on the final entry into force of the TRAF, which will bring the remaining provisions into force from January next year.

The Federal Council said that the TRAF will introduce internationally competitive tax measures that will enable Switzerland to remain an attractive business location, as the tax regimes it will replace are no longer in line with international standards.

The TRAF will abolish special arrangements for cantonal status companies and introduce a mandatory patent box regime for all cantons, with additional optional deductions for research and development expenditure. It sets a minimum level of taxation for dividends from qualified participants, introduces additional depreciation measures for companies relocating to Switzerland, and extends the application of the flat-rate tax credit.

If a canton fails to implement the mandatory TRAF provisions by January 1, 2020, federal law will apply directly.

TAGS: compliance | tax | business | patents | tax compliance | tax avoidance | law | transfer pricing | Switzerland | dividends | standards | research and development | Tax | Tax Evasion | BEPS

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